18 Jul 2018
Is there life after Brexit for the UK’s Life Sciences sector?
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In another extract from our report on ‘Brexit, Business Leaders and Investment’, Chris Hamilton, Head of Odgers Berndtson’s Life Sciences Practice in London, provides an insider’s perspective on Brexit’s implications for the health of a high-value sector that supports almost half a million UK jobs.
Life Sciences is a truly international sector and the UK has greatly benefited from being part of a single European community, both for R&D and commercial opportunities.
Put simply, Brexit is a challenge that most people in the Life Sciences sector would rather not have faced. The UK participates in EU-wide clinical trials and adheres to the same regulation and procedures as other EU countries. This allows it to actively drive R&D of real scale.
Once the UK leaves the EU, it is by no means certain how easy it can continue to participate in such programmes, and therefore how attractive it will remain a home for drug development.
There are additional uncertainties about the future of pooled research funding because so many of the collaborations that happen are international, leaving it unclear where the UK might fit in. Whilst there have been a couple of notable recent investment commitments to R&D capability in the UK, it remains to be seen whether this trend will continue in the medium and long-term.
“The quality of the science that we produce in this country is exceptional, but attracting and holding onto talent will become increasingly challenging until there is greater clarity.”
London’s loss, Amsterdam’s gain
Another major factor is the European Medicines Agency (EMA), currently based in Canary Wharf. Approval of a new drug by the EMA gives automatic approval across the EU, albeit subject to local pricing and funding decisions.
The EMA has announced it is relocating to Amsterdam, which could mean that to approve a drug in the UK, companies might also have to follow a local process. Beyond this, the supply chain is a very big challenge, not least because any sort of customs approval process has the potential to slow down the movement of goods. Whilst this impacts all sectors, the production, storage and supply of medicines is particularly complex and often highly time-sensitive.
The UK might develop brilliant drugs, but a UK launch may not be a top priority for businesses eyeing larger, more immediate gains in the US and EU markets. Overall, the knock-on effects of the situation with the EMA are considerable.
Investment focus shifts
For some businesses based in the US, Asia, and other key markets, the UK feels like an increasingly uncertain place to invest. A client of ours, based in Asia-Pacific, recently took the decision to halt their UK-based recruitment because of the increasing worry that Britain no longer has solid growth potential. People look at the UK from overseas, and because of the uncertainty, many don’t have the appetite to invest serious cash here. Uncertainty over investment prevails.
In our Practice, we’re having conversations about roles where a company is making an investment, but instead of basing it in the UK they are looking to base it in continental Europe. Searches like this play to our strengths as we are a global practice and well used to moving talent across borders.
Upsides to come
Sitting within a global practice, I think the future for our UK team will be in looking for opportunities that arise from Brexit, and there definitely will be some potential upsides.
Brexit might actually make clinical trials easier to run if we can relax regulation and facilitate a faster development process. The UK used to be a really good destination for clinical trials. Post-Brexit there could be more businesses looking to relocate and grow their programmes here if the regulatory, policy and economic conditions are right
Looking beyond the UK markets
I don’t think there’ll be less activity in Life Sciences for the UK after Brexit, but I do think it will be different. The UK has lots of SMEs and AIM-listed healthcare and biotech companies and I don’t think they’re going anywhere. But taking a drug to launch, commercialising and then globalising it will call for more leaders with deep experience in European and US markets. Unfortunately, the value of UK knowledge and expertise might become increasingly marginalised.
The jobs that will exist tomorrow will probably be more focused on how to take a UK-grown drug into Europe, and the rest of the world.
These insights by Chris Hamilton, Head of Odgers Berndtson’s Life Sciences Practice in London, are part of ‘Brexit, Business Leaders and Investment’, a major report from Odgers Berndtson. As leaders in global executive search, across multiple functions and sectors, we have a unique perspective that comes from being close to top executives in almost 30 countries.